Core Insights - The OTC market is increasingly becoming a preferred option for small and medium-sized enterprises (SMEs) from China seeking to enter the U.S. capital market due to its shorter listing cycle and lower listing requirements [2][19]. Group 1: Overview of OTC Market - The OTC market, or Over-the-Counter market, is one of the oldest and largest trading markets in the U.S., accounting for 75% of the total trading volume in American securities [4]. - As of now, there are 12,281 companies listed on the OTC market, including 826 Chinese enterprises [4]. Group 2: OTC Market Listing Conditions - The OTC market is divided into three tiers based on company transparency and financial disclosure: OTCQX (highest level), OTCQB, and OTC ID, with progressively relaxed listing requirements [6]. - OTCQX requires companies to meet specific financial standards, such as having a net tangible asset value of $5 million for companies with less than three years of operating history, or an average revenue of $6 million over the past three years [8]. - OTCQB has more lenient financial and governance requirements, making it suitable for startups or companies that do not yet meet the higher standards [9]. - OTC ID has no strict reporting and financial data submission requirements, allowing companies to choose their level of information disclosure [12]. Group 3: OTC Listing Process - The OTC listing process is relatively simpler compared to other exchanges, with companies typically opting for shell acquisitions or direct listings to enter the market [14][16]. Group 4: Advantages of OTC Market - The OTC market offers lower listing costs compared to major exchanges like NASDAQ and NYSE, making it an attractive option for SMEs [19]. - The listing thresholds are lower, and the time required for listing is shorter, allowing companies to meet market requirements more easily [20]. - The flexible listing rules provide companies with more options to tailor their listing strategy to their specific needs [21].